It is ‘false news’ to suggest US stocks are over-priced, according to Magellan chairman and chief investment officer, Hamish Douglass.
Speaking during the Magellan Adviser Roadshow in Sydney, Douglass sought to explain his company’s continuing exposure to US stocks and examined the rationale behind claims that US stocks were over-priced, and suggested such assertions failed to take account of valuations in other markets.
“I am not arguing that the US market is cheap,” Douglass said before going on to point to the areas in which he believed value could continue to be achieved.
In doing so he compared the value of four consumer staples in the US which he noted were trading at a valuation of 18.4 times earnings and comparable companies based outside the US which he noted were trading at an average 20.9 times earnings.
Douglass undertook similar exercises with respect to technology, health care and bank stocks and noted that the US stocks were either trading on valuations either on par with their non-US counterparts or slightly cheaper.
He said there was simply not a lot of evidence that valuations outside of the US were significantly cheaper.
